All opinions are
subject to modification and technical correction prior to official publication
in the North Carolina Reports and North Carolina Court of Appeals Reports. In
the event of discrepancies between the electronic version of an opinion and the
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of Appeals Reports, the latest print version is to be considered authoritative.

IN THE SUPREME COURT OF
NORTH CAROLINA

No. 415PA05

FILED:18 AUGUST 2006

CAROLINE D’AQUISTO,
Employee

v.

MISSION ST. JOSEPH’S
HEALTH SYSTEM, Employer,

CAMBRIDGE INTEGRATED
SERVICES, Servicing Agent

On discretionary review pursuant to
N.C.G.S. §7A-31 of a unanimous decision of the Court of Appeals, 171 N.C. App.
216, 614 S.E.2d 583 (2005), affirming an opinion and award filed on 20 May 2004
by the North Carolina Industrial Commission.Heard in the Supreme Court 18 April 2006.

The
Sumwalt Law Firm, by Vernon Sumwalt, and Ganly & Ramer, PLLC, by Thomas F.
Ramer, for plaintiff-appellee.

As
to whether the Court of Appeals erred by affirming the imposition of sanctions
against defendant under N.C.G.S. §97-88.1, we hold that based upon the specific
facts of this case, defendant’s defense of plaintiff’s claims was not without
reasonable grounds.We further conclude
that the petition for discretionary review as to additional issues was
improvidently allowed.

Thus we reverse that portion of the Court of Appeals
opinion affirming the imposition of sanctions and remand this case to the Court
of Appeals for remand to the Industrial Commission for further proceedings not
inconsistent with this opinion.

REVERSED
IN PART AND REMANDED; DISCRETIONARY REVIEW IMPROVIDENTLY ALLOWED IN PART.